Consignment agreement, Fen and Kiln Ceramics

Consignment agreement template with the split and a stock list

Consignment only works when both sides can agree on two things: what the shop is holding, and who carries the loss when a bowl gets knocked off a shelf. This agreement signs a stock list on every drop, fixes the split at 60 to 40, and puts breakage and theft squarely on the shop until the piece sells.

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Consignment agreement · Fen and Kiln Ceramics with The Paper Wren · Drop 1Page 1 of 4
Consignment agreement · Fen and Kiln Ceramics with The Paper Wren · Drop 1Page 2 of 4
Consignment agreement · Fen and Kiln Ceramics with The Paper Wren · Drop 1Page 3 of 4
Consignment agreement · Fen and Kiln Ceramics with The Paper Wren · Drop 1Page 4 of 4
Consignment agreement

This agreement is made on 5 April 2027 between Fen and Kiln Ceramics, a sole trader operated by Tabitha Renshaw, called the maker, and The Paper Wren Ltd, which runs a gift shop at 44 Lantern Street, called the shop. The maker consigns stock to the shop for sale. The stock stays the property of the maker until a customer buys it.

60%
Maker share
40%
Shop commission
15th
Paid by
90 days
Return after
1. The stock on consignment
1.1
Every drop is counted and signed for
Each delivery is a drop. The maker sends a stock list with every drop, the shop counts it against the list on the day it arrives, and both parties sign the list. The signed list is the record of what the shop holds. Drop 1 is below.
Item
Qty
Retail
Maker 60%
Retail value
Tumbler, speckled glaze
24
$38.00
$22.80
$912.00
Mug, ash glaze
18
$46.00
$27.60
$828.00
Serving bowl, 24 cm
10
$120.00
$72.00
$1,200.00
Vase, tall
6
$185.00
$111.00
$1,110.00
Butter dish
8
$68.00
$40.80
$544.00
Drop 1, 66 pieces at retail
$4,594.00
1.2
Prices are set by the maker
The retail prices in the stock list are set by the maker and the shop sells at those prices. The shop may run a sale only with the written agreement of the maker, and where it does, the split applies to the discounted price. The shop does not sell the same pieces online without written agreement, so the maker is not undercut in its own shop.
2. The split and payment
2.1
Sixty to the maker, forty to the shop
On each sale the maker receives 60 percent of the retail price and the shop keeps 40 percent as commission for holding, displaying and selling the stock. The commission covers the floor space, the staff, the card fees and the wrapping. No other deduction is made: there is no shelf fee, no photography fee and no charge for a window display.
2.2
A statement and a payment every month
By the 15th of each month the shop sends the maker a statement for the month before, listing each piece sold, its retail price, the date it sold and the share due, together with the closing stock count. The shop pays the amount due by bank transfer on the same day. Where a statement is late, the maker may ask for the stock back on seven days notice.
Worked example, April
Sold
Retail taken
Due to maker
Tumblers
9
$342.00
$205.20
Mugs
7
$322.00
$193.20
Serving bowls
2
$240.00
$144.00
Paid on 15 May 2027
$542.40
3. Ownership, risk and insurance
3.1
The stock belongs to the maker until it sells
Title in every piece stays with the maker until a customer pays for it, at which point title passes straight from the maker to the customer. The shop holds the stock as a bailee, keeps it separate in its records from stock it owns, and does not pledge it, use it as security or allow anyone else to take a charge over it.
The shop carries the risk of damage and theft
From the moment the shop signs the stock list to the moment a piece is sold or returned, the shop is responsible for loss, breakage and theft, however it happens, including damage by a customer. The shop pays the maker 60 percent of the retail price of any piece lost or broken, on the next monthly statement. Insurance is the choice of the shop, and having none does not change this clause.
3.2
Display and handling
The stock is displayed on a shelf or table, not on the floor, away from a doorway or a till where a bag can sweep it, and is not used as a prop for another product. Pieces are wrapped in paper and boxed at the point of sale. A piece a customer damages before buying is treated as broken under the callout above.
4. Stock that does not sell
4.1
Ninety days, then it comes home or it is reordered
Any piece unsold 90 days after the drop it came in is either returned to the maker or kept for a further 90 days, and the shop tells the maker which by the end of the 90 days. The maker may recall stock at any time on 14 days written notice. Returns are packed in the boxes the stock arrived in and collected by the maker, who pays the cost of collection.
4.2
Counting stock together
The parties count the stock together every three months, at the shop, and sign the count. A difference between the count and the statements is settled on the next statement. The maker may inspect the stock and the display during shop hours on one day notice.
5. Marketing and credit
5.1
The maker is named
The shop names the maker on the shelf card, on its website where the pieces appear, and in any social post that shows the work. The maker may photograph its own work in the shop and share it. Neither party uses the trade mark or logo of the other beyond that without written agreement.
6. Ending the agreement
6.1
Notice, and what happens to the stock
Either party may end this agreement on 30 days written notice. On the last day the shop pays everything owed to that date and the maker collects the unsold stock within 14 days. Where the shop closes, becomes insolvent or stops trading, the maker may collect the stock immediately, and the shop does not treat consigned stock as its own asset, because it is not.
6.2
Notices, variation and the whole agreement
Notices are given by email to the addresses the parties use for orders. A change to the split, the prices or the return period takes effect only when both parties agree it in writing. This document and the signed stock lists are the whole agreement between the parties.
Tabitha Renshaw, Fen and Kiln Ceramics
Name
:
Date
:
For The Paper Wren Ltd
Name
:
Position
:
Date
:

Section by section

What each section is for, so you can keep the ones you need and drop the rest.

Parties and key facts
The maker, the shop, the statement that stock stays with the maker, and the split, payment date and return period.
1. The stock on consignment
Signing for each drop, the five row stock list totalling $4,594, and who sets retail prices.
2. The split and payment
Sixty to 40 with no other deduction, the monthly statement by the fifteenth, and a worked April example.
3. Ownership, risk and insurance
Title staying with the maker, the shop as bailee, the damage and theft callout, and display rules.
4. Stock that does not sell
The 90 day window, recall on 14 days notice, and a quarterly count signed by both.
5. Marketing and credit
Naming the maker on the shelf card and online, and use of each party trade mark.
6. Ending the agreement
Thirty days notice, collection of stock, and what happens if the shop closes or becomes insolvent.
Signatures
A block for the maker and one for the shop.

Clauses in this document

How to adapt this agreement

For a shop that wants to buy wholesale instead, delete the ownership and risk sections entirely and replace them with a purchase order and payment terms, because wholesale moves title and risk at delivery and the whole consignment structure becomes unnecessary. For an online shop selling the same pieces, expand clause 1.2 into a channel clause naming which pieces may be listed online, who photographs them, who pays postage and how a return from a customer is handled, since an online return of a consigned piece is the case nobody plans for. For stock worth enough to matter on a balance sheet, add a clause requiring the shop to acknowledge a registered consignment interest and cooperate with the registration, and register it, because that registration is what protects the maker if an administrator arrives.

Why the risk clause is the one to read first

Consignment is generous to the retailer by design: no stock is bought, no capital is tied up, and unsold pieces go home. The trade for that is that the retailer looks after the goods while they are on its floor. An agreement that leaves risk with the maker gives the shop free inventory with no downside, and the maker discovers this the first time a shelf is knocked over. Clause 3.2 goes further and says where pieces may be displayed, because the difference between a bowl on a table and a bowl on the floor beside a doorway is most of the breakage risk. The number in the callout, 60 percent of retail, is deliberately the same as the maker share, so a broken piece leaves the maker where a sold piece would have.

What makes this document work

Every drop is signed for, so the count is never in dispute

Clause 1.1 makes the signed stock list the record of what the shop holds, and drop 1 shows 66 pieces with a retail value of $4,594. Three months later, when the quarterly count in clause 4.2 happens, both parties are checking against a document they both signed rather than against memory.

The split is stated as what it does and does not cover

Sixty percent to the maker, 40 to the shop for holding, displaying and selling, covering floor space, staff, card fees and wrapping. Clause 2.1 then says no other deduction is made: no shelf fee, no photography fee, no charge for a window display. That sentence is the whole negotiation.

Risk sits with the shop, and the callout says so without hedging

From signing the stock list to the sale or return of a piece, loss, breakage and theft are the responsibility of the shop, including damage by a customer, paid at 60 percent of retail on the next statement. Whether the shop insures is its own choice, and having no cover changes nothing.

Questions people ask

What should a consignment agreement include?

How stock is delivered and counted, a stock list with retail prices, the split and what the commission covers, when statements and payments are due, who owns the stock, who carries the risk of damage and theft, how long unsold stock stays, and what happens if the shop closes.

What is a normal consignment split?

Between 50 and 40 percent to the retailer is typical for handmade goods, with the maker keeping the rest. This agreement uses 60 to the maker and 40 to the shop, and the value of naming it precisely is that clause 2.1 then rules out any other deduction on top.

Who owns consignment stock?

The maker, until a customer pays. Clause 3.1 says title passes straight from the maker to the customer at the point of sale, and that the shop holds the stock as a bailee, keeps it separate in its records and does not pledge it or allow anyone to take a charge over it.

Who pays if consigned stock is broken or stolen?

The shop, from the moment it signs the stock list until the piece is sold or returned, including damage caused by a customer. The callout in section 3 sets the amount at 60 percent of the retail price, paid on the next monthly statement, and notes that having no insurance does not change the position.

How long should stock stay on consignment?

Ninety days is a common first window. Clause 4.1 then requires the shop to say whether a piece goes back or stays for a further 90 days, so nothing sits on a shelf indefinitely, and gives the maker a right to recall stock at any time on 14 days notice.

What happens to consigned stock if the shop closes?

Clause 6.1 lets the maker collect it immediately where the shop closes, becomes insolvent or stops trading, and states that consigned stock is not an asset of the shop. Registering the consignment interest where the law allows is the further step a maker with significant stock should take.

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